October 19, 2020

3rd Fiscal Period (Ended August 2020)
Financial Results Briefing Materials

AssetManagement
CompanySANKEI REAL ESTATE Inc.

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SANKEI REAL ESTATE Inc.

Table of Contents
Executive Summary
1. Financial Results andManagement Highlights

… P3
… P4

2. Internal Growth Results and Strategy … P15
2-1 Internal Growth Results… P16

2-2 Internal Growth Strategy… P21

3. External Growth Results and Strategy … P23
3-1 External Growth Results… P24

3-2 External Growth Strategy… P26

4. Financial Strategy… P32

5. ESG Initiatives… P35

Appendix… P40

Disclaimer
This document is intended for the purpose of providing information on
SANKEI REAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), and is
not intended for the purpose of soliciting investment in orrecommending the trading of specific products. Please consult yoursecurities company for any purchase of SANKEI REAL ESTATE investment
units. When making any investment, investors do so at their sole
discretion and risk. The information provided in this document is ananalysis or a judgment made by Sankei Building Asset Management Co.,
Ltd. (hereinafter, “Sankei Building Asset Management”) based on
information currently available to Sankei Building Asset Management,
and Sankei Building Asset Management does not guarantee and is notliable whatsoever for the accuracy, reliability, integrity, etc. thereof. In
addition, the content may be changed or abolished without prior notice.
The content of this document contains earnings forecasts and otherforward-looking statements. These forward-looking statements are nota guarantee of future business performance or financial content of
SANKEI REAL ESTATE. All rights to any part of this document belong toSankei Building Asset Management, and no part of this document shallbe used, cited, reproduced, altered, disassembled, transmitted, etc. by
any means, electronic or mechanical, for any purpose without
permission. This document is not a disclosure document based on the
Financial Instruments and Exchange Act. Please contact below if you
have any inquiries concerning this document.
Sankei Building Asset Management Co., Ltd.
Finance & IR Department
Phone: +81-3-5542-1316

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SANKEI REAL ESTATE Inc.

Executive Summary
Financial Results and Management Highlights
 Realized strong internal growth mainly for large office buildings(5th FP onwards (during normal operations) DPU*1 Impact*2: +149 yen)

 Acquired "S-GATE AKASAKA," a rare property in central Tokyo, and continued to achieve external growth steadily(Impact of DPU for 4th FP*3: +115 yen)

 There was almost no impact of COVID-19 pandemic(Impact of DPU for 3rd FP*4: +54 yen from the beginning-of-period forecast*5/ -18 yen from the previous fiscal period)

Future Growth Strategies

 External growth policy will remain unchanged, realize abundant pipeline(approx. 50 to 100 billion yen)
 Expanding the range of sub-assets to logistics facilities and residences, centering on office buildings in major
metropolitan areas Implementing strategic leasing (maximizing revenue)
*1
*2
*3
*4
*5
*6

DPU refers to distribution per unit.
Calculated by converting the amount of increase in monthly rent and CAM revenue into that for the full period (6 months) and dividing it by the number of investment units issued and outstanding (356,800 units).
Calculated by dividing the amount of increase in net profit due to the acquisition of "S-GATE AKASAKA" by the number of investment units issued and outstanding (356,800 units).
Of the net profit for the 3rd FP, the amount equivalent to the impact of the COVID-19 pandemic is divided by the number of investment units issued and outstanding (356,800 units).
Beginning-of-period forecast refers to the forecasts for the 3rd FP upon the announcement of the financial results for the previous fiscal period (April 2020).
Figures are rounded down to the indicated digits.

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SANKEI REAL ESTATE Inc.

1. Financial Results and Management Highlights

4

SANKEI REAL ESTATE Inc.

Financial Results Highlights (Comparison with beginning-of-period forecast)- There was almost no impact of the COVID-19 pandemic. DPU increased significantly  DPU for the 3rd FP was 2,532 yen, up 208 yen (+9.0%) from beginning-of-period forecast (2,324 yen)
Financial Summary for 3rd Fiscal Period (Ended August 2020)
Comparison with beginningResultsof-period forecast
Operating revenue

2,005 million yen+6 million yen

Operating profit

996 million yen+73 million yen

Net profit

903 million yen+74 million yen

2,532 yen

+208 yen

DPU (distribution per unit)

Change in DPU for the 3rd Fiscal Period (Ended August 2020)(Unit: yen per unit)

2,550 yen
2,500 yen

2,532 yen

Increase of 208 yen+9.0%

2,350 yen

2,373 yen

・ Non-implementation of repair work
・ Non-use of operating expenses otherthan expenses related to leasing
business

Breakdown of DPU+6.7%
3rd FP Forecast
Revision(Aug. 2020)* Figures are rounded down to the indicated digits, and ratios are rounded off.

+29 yen+50 yenComparison with Comparison with
beginning-of-period previous fiscal
forecast
periodChange2,200 yen
3rd FP forecast uponannouncement of financial
results for previous
fiscal period(Apr. 2020)+38 yen

There was almost no impact of the COVID-19
pandemic

2,324 yen
+2.1%

+54 yen<Results>

2,300 yen
2,250 yen・ Comparison with forecast for the
impact of COVID-19 pandemic
・ Reduction of outsourcing expenses<Risk of decrease in revenue assumed in beginning-of-period forecast>・Decrease in revenue equivalent to approximately 0.4% of rental
revenue for stores and rental conference rooms
・Decrease in utilities balance in anticipation of the increase in remote work,etc.
・No decrease in revenue for offices and hotels

2,450 yen
2,400 yen

Main breakdown

3rd FP
Results(Oct. 2020)

ChangeRevenue for stores andrental conference rooms+26 yen-8 yenUtilities balance+28 yen-10 yenTotal+54 yen-18 yen

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SANKEI REAL ESTATE Inc.

Financial Results Highlights (Comparison with beginning-of-period forecast)
3rd Fiscal Period (Ended August 2020)
 Revenue and profits increased from beginning-of-period forecast
Accounting period

3rd FP Forecasts (A)(as of April 2020)

3rd FP Results (B)(August 2020)

Operating revenue

1,999

2,005

6

1,866

1,878

12

Parking revenue

27

29

2

Utilities reimbursement

98

90

(7)

Other revenue
Operating expenses
Expenses related to leasing
business [Total]

6
1,076

6
1,009

(0)
(66)

828

778

(49)

Outsourcing expenses

186

172

(13)

Utilities expenses

136

118

Repair expenses

4535(10) Non-implementation of repair work, decrease in construction cost, etc.

Property taxes
Depreciation
Other expenses
Operating income (loss)
from leasing business
Other than expenses related
to leasing business [Total]
Asset management fee
Other expenses
Operating profit

220
220
18

215
219
17

(5) Burden adjustment of fixed assets tax, etc. fell below forecast, decrease in depreciable assets tax(1) Decrease in depreciation due to decrease in capital expenditure (construction) (-50)
(0)

1,170

1,226

56

247

230

(17)

179
67
923

183
46
996

4
(21) Unused IR expenses for settlement, unused reserve, etc. -20
73

0

0

Rental and CAM revenue

Non-operating income

Difference(B)-(A)(Unit: million yen)

Major Factors for the Difference

0

93

92

(0)

Ordinary profit

830

904

74

Distribution per unit

829

903

74

2,324 yen

2,532 yen

208 yen

1,391

1,446

54

NOI
* Figures are rounded down to the indicated digits.

Decrease in electricity and air-conditioning charge due to remote work, etc. (Shinagawa -5,
BREEZÉ -1, Other -1)

BM fee -9 (reduction, postponement of inspection), PM fee -1 (absence of reserve for leasingfee), CM fee -3 (non-implementation of construction work)
Decrease in electricity and air-conditioning expenses due to remote work, etc. -16 (Shinagawa -8,(18) BREEZÉ -4, Hatchobori -2.1, Hibiya -1.6, etc.), reduction due to change in electricity supplier -1.6
(NIHONBASHI-HONCHO)

Non-operating expenses
Net profit

No decrease in rental revenue for stores +8, increase against the expected decrease in revenue
for rental conference rooms +1.8

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SANKEI REAL ESTATE Inc.

Management Highlights - Realized strong internal growth mainly for large office buildings  Realized a significant upward rent revision even amid the COVID-19 pandemic
BREEZÉ TOWER
Renewal with rent
revision/renewal
New replacements

Impact of DPU*2+10.1%+46.8%+48 yenShinagawa Seaside TS Tower
Renewal with rent revision/renewal
Rent increase(Not disclosed)

Impact of DPU*2+72 yenRent Revision Performance of Office Buildings*1

Rate of increase
Amount of monthly
rent increase

4,165 tsubos
98.3%+12.7%+8.9 million yen

S-GATE AKIHABARA

Tokyo Sankei Building

Target area
Percentage of rent
increase

Renewal with rent
revision/renewal
New replacements+14.9%+33.3%

Renewal with rent
revision/renewal
New replacements*1 For lease agreements concluded between March 1, 2020, and August 31, 2020, (including new replacements) targeting office buildings among the assets under management for the 3rd FP.
*2 Calculated by converting the amount of increase in monthly rent and CAM revenue into that for the full period (6 months) and dividing it by the number of investment units issued andoutstanding (356,800 units).
*3 Figures are rounded down to the indicated digits, and ratios are rounded off.

+9.6%
－

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SANKEI REAL ESTATE Inc.

Management Highlights- Continued to achieve steady external growth - <4th FP: Acquired on October 1, 2020>
 With the expectation of potential redevelopments in the neighborhood, acquired “S-GATE AKASAKA,” arelatively new property in central Tokyo*1
Sannoshita

Akasaka Biz Tower
akasaka Sacas
Akasaka
ACT Theater

Planned neighborhood
Redevelopment Area

Akasaka BLITZ

Akasaka 2 Police Box
Kokusai Shinakasaka Bldg. EastTBS
Kokusai Shinakasaka Bldg. West

KAJIMA CORPORATION KI Bldg.

S-GATE AKASAKA

Portfolio After Acquisition(as of October 1, 2020)
Asset size
Number ofproperties
Averagebuilding age*1 SANKEI REAL ESTATE has acquired 60% quasi co-ownership interest in real estate trust beneficiary rights.
*2 Figures are rounded down to the indicated digits.

67.3 billion yen▶

71.5 billion yen

11 properties▶

12 properties

16.8 years▶

16.1 years

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SANKEI REAL ESTATE Inc.

DPU for 3rd Fiscal Period (Ended August 2020) (Comparison with previous fiscal period)- Strong internal growth contributed to the increase in actual DPU  In the 3rd FP, actual DPU increased by 140 yen (+ 5.9%) from the previous fiscal period when comparing
actual DPU excluding the impact of the expensing of fixed assets tax in order to facilitate the comparison
between the 3rd FP (after the expensing of fixed assets tax) and the previous fiscal period (before the expensing)(yen per unit)

2,995■ Summary of DPU for 3rd Fiscal Period (Ended August 2020)

Main breakdown

Increase (decrease)in operating income(loss) from leasing
business

・ Increase in rental and CAM revenue+245・ Increase in outsourcing expenses-15

・ Reduction of repair expenses+32

Expensing of
fixed assets
tax
-603

-100

* Figures are rounded down to the indicated digits, and ratios are rounded off.

+140 yen(+ 5.9%)

Increase (decrease) in generaland administrative
expenses/non-operatingbalance

Actual DPU for
the previous
fiscal period

Comparison with actual
DPU for the previous fiscal
period-18
Risk of the COVID-19
pandemic

3rd FP Results

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SANKEI REAL ESTATE Inc.

Results for 3rd Fiscal Period (Ended August 2020) (Comparison with previous fiscal period) Operating revenue increased from the previous fiscal period (2nd FP: FP ended Feb. 2020)(Unit: million yen)Accounting period

2nd FP Results (A)(February 2020)

3rd FP Results (B)(August 2020)

Difference(B)-(A)

Operating revenue

1,933

2,005

72

1,796

1,878

82 (BREEZÉ +14.4, Hatchobori +4.4, Hibiya +1), elimination of rent holiday +5.4 (Hibiya +3.6,

Parking revenue

29

29

0

Utilities reimbursement

102

90

(11)

5

6

1

Operating expenses
Expenses related to leasing
business [Total]
Outsourcing expenses

767

1,009

241

577

778

201

167

172

Utilities expenses

126

118

46
215
21

35
215
219
17

1,355

1,226

(129)

189

230

40

Asset management fee

139

183

44

Other expenses

50

46

(3)

Operating profit

1,166

996

(169)

Non-operating income
Non-operating expenses
Ordinary profit
Net profit

0
97
1,069
1,068

0
92
904
903

(0)
(4) Decrease in investment unit issuance expenses, etc.
(165)
(165)

2,995 yen

2,532 yen(463 yen)

1,571

1,446

(125)

Major Factors for the Difference

Elimination of free rent for major tenants +58 (NIHONBASHI-HONCHO), upward rent revision +20

Rental and CAM revenue

Hatchobori +1.8), rental conference room, etc. -7

Other revenue

Repair expenses
Property taxes
Depreciation
Other expenses
Operating income (loss) fromleasing business
Other than expenses related
to leasing business [Total]

Distribution per unit
NOI
* Figures are rounded down to the indicated digits.

Reduction of electricity and air-conditioning charge due to remote work, etc. (Shinagawa -7.8,
Toyo -1.6, Omori -1.3, etc.)

5 Increase in PM incentive fee due to rent increase, etc.
Reduction of electricity and air-conditioning expenses due to remote work, etc.
(Shinagawa -4, Toyo -1.2, BREEZÉ -2, etc.)(11) Non-implementation of repair work, reduction of construction cost, etc.

(7)215 Expensing from the 3rd FP
3 Increase due to capital expenditure in the previous fiscal period(3)

Increase in management fee due to increase in total assets in the previous fiscal period andincrease in revenue in the current fiscal period

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SANKEI REAL ESTATE Inc.

Earnings Forecasts for 4th Fiscal Period (Ending February 2021)
 Strong internal growth is expected to increase DPU for the 4th FP and 5th FP(Unit: yen per unit)

3,000 yen

Rentalrevenue384
2,900 yen
General andadministrative
expensesNon-operating
income (loss)

2,800 yen

Rentalrevenue87-164
2,700 yen
Operatingincome (loss)
from otherleasing business

2,600 yen

General andadministrative
expensesNon-operating
income (loss)

-36
-48

Operatingincome (loss)
from otherleasing business-28
Assumed GV*1

-43

-0Assumed GV*1

2,500 yen

2,400 yen

2,300 yen

3rd FP
DPU
Results

4th FPDPU
Forecast

5th FPDPU
Forecast*1 Assumed GV (General Vacancy) is the amount equivalent to 0.5% of the rental and CAM revenue, calculated as a certain risk of decrease in revenue caused by the risk of the COVID-19 pandemic.
*2 Figures are rounded down to the indicated digits.

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SANKEI REAL ESTATE Inc.

Earnings Forecasts for 4th Fiscal Period (Ending February 2021) and Thereafter DPU for 4th FP: +5.7% from the previous fiscal period (2,676 yen), DPU for 5th FP: +0.3% from the previous
fiscal period (2,684 yen) are expected(Unit: million yen)Accounting period

3rd FP Results (A)(August 2020)

4th FP Forecasts (B)(February 2021)

Operating revenue

2,005
1,878

Rental and CAM revenue

Difference (B)-(A)5th FP Forecasts (C)(August 2021)

Difference (C)-(B)

2,135

130

2,166

31

2,015

137

2,046

31

Major Factors for the Difference
4th FP Forecasts (Comparison with 3rd FP)
Operating revenue (+130)

(10)

(10)

(10)

(0)

・ Increase in rental revenue due to upward rent revision in 3rd FP (+76)

Parking revenue

29

30

0

30

0

・ Elimination of rent holiday for some tenants (+5)

Utilities reimbursement

90

94

3

94

0

・ Increase in rental revenue due to acquisition of S-GATE AKASAKA (+70)

Other revenue

6

5

(0)

5

(0)

・ Assumed GV + downtime of currently vacant properties (-21)

1,009

1,084

75

1,102

17

778

840

61

853

13

172

185

13

177

(8)

・ Increase in outsourcing expenses due to acquisition of S-GATE AKASAKA (+6)

Utilities expenses

118

122

3

122

0

・ Increase in utilities expenses due to acquisition of S-GATE AKASAKA (+3)

Repair expenses

35

68

33

68

0

・ Increase in repair expenses (+33)

Property taxes

215

215

0

234

18

Depreciation

219

228

9

230

2

・ Increase in depreciation due to acquisition of S-GATE AKASAKA andCAPEX (+9)

17

19

1

19

0

5th FP Forecasts (Comparison with 4th FP)

1,226

1,295

68

1,313

18

230

243

13

248

4

・ Full-period contribution of rental revenue due to upward rent
revision in 3rd FP (+10)

183

184

0

193

9

・ Full-period contribution to rental revenue by S-GATE AKASAKA (+14)

46

59

13

55

(4)

・ Elimination of free rent, etc. for some tenants (+11)
・ Downtime of vacant properties (-4)

Assumed GV

Operating expenses
Expenses related to leasing
business [Total]
Outsourcing expenses

Other expenses
Operating income (loss) fromleasing business
Other than expenses related toleasing business [Total]
Asset management fee
Other expenses
Operating profit

Expenses related to leasing business (+61)

Operating revenue (+31)

996

1,051

54

1,064

13

Non-operating income

0

0

0

0

0

Non-operating expenses

92

95

3

106

10

Ordinary profit

904

955

51

958

2

・ Outsourcing expenses (-8)

Net profit

903

954

51

957

2

・ Increase in property taxes due to change of evaluation (+18)

2,532 yen

2,676 yen

144 yen2,684 yen

8 yen

1,446

1,523

77

1,543

20

Distribution per unit

NOI

Expenses related to leasing business (+13)

・ Increase in depreciation due to CAPEX (+2)

*1 Assumed GV (General Vacancy) is the amount equivalent to 0.5% of the rental and CAM revenue, calculated as a certain risk of decrease in revenue caused by the risk of the COVID-19 pandemic.
*2 Figures are rounded down to the indicated digits, and ratios are rounded off.

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SANKEI REAL ESTATE Inc.

Change in NAV per Unit*1
 NAV per Unit at the End of the 3rd FP increased by 8,872 yen (+ 7.6%) from the End of the 2nd FP to 126,023 yen(Before deduction of distribution)

 Increase in NCF due to upward rent revision → Increase in price calculated at the end of the period(no change in cap rate) → Increase in NAV(Unit: yen per unit)
130,000

126,023
3rd FP
Increase due tointernal growth

120,000

2nd FP
Increase mainly
due to external
growth109,583

110,000

Unrealized
gain

11,670100,000

Net assets

117,151+7.6%
21,078
Increasein NCF+6.9%

11,743

Capitalincreasethroughpublicoffering

105,408

104,945

第2期末End
of 2nd FP(End of February 2020)

第3期末
End
of 3rd FP(End of August 2020)

97,91390,000

第1期末End
of 1st FP(End of August 2019)（2019年8月末）（2020年2月末）*1 NAV per unit = (Net assets + Unrealized gain on appraisal basis) ÷ Number of investment units issued and outstanding*2 Figures are rounded down to the indicated digits, and ratios are rounded off.

（2020年8月末）
13SANKEI REAL ESTATE Inc.

MEMO

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SANKEI REAL ESTATE Inc.

2. Internal Growth Results and Strategy

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SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results - Actual NOI yield increased significantly due to upward rent revision  Actual NOI yield was +30 bp from the previous fiscal period
Change in Actual
NOI Yield

4.0%

4.0%

4.3%

1st FP (Ended August 2019)

2nd FP (Ended February 2020)

3rd FP (Ended August 2020)(Since fixed assets tax has not been expensed in the 1st FP and 2nd FP, the level during normal operations in
consideration of such status is indicated) Status of average operating unit price (yen per tsubo): + 5.5% from the previous fiscal period
Office buildings
Average

17,992 yen

17,523 yen

18,486 yen

As of August 31, 2019

As of February 29, 2020

As of August 31, 2020

(Rental and CAM revenue upon the most recent settlement / 6 months / leasable area x occupancy rate) Rent Revision Performance of Office Buildings*2(for lease agreements concluded between March 1, 2020, and August 31, 2020 (including new replacements))
Targeted leased area
Number of(Ownership interest oftargeted tenants SANKEI REAL ESTATE)
Increase

No change

Decrease

Renewal with rent
revision/renewal

24

3,795 tsubos

New replacements

3

300 tsubos

Renewal with rent
revision/renewal

3

70 tsubos

New replacements

00 tsubos

Renewal with rent
revision/renewal

00 tsubos

New replacements

00 tsubos

Total

30

Leased area
subtotal

98.3%

70 tsubos

1.7%

0 tsubos

0.0%

4,165 tsubos

100.0%

Investment
Corporation A

19,349 yen

Investment
Corporation B

18,669 yen

Investment
Corporation C

18,275 yen

Rate of rent increase
compared with before

Percentage*3

4,095 tsubos

Cases of Other REITs*1▶

Renewal with rent
revision/renewal+9.9%

New replacements+43.7%+12.7%*1 They do not guarantee accuracy as the values were estimated at the Asset Management Company based on the most recent disclosed material by extracting REITs specializing in offices listed inthe "ARES J-REIT Digest" as well as investment corporations with a holding ratio of over 70% in the Tokyo 23 wards on an acquisition price basis.
*2 “Office buildings” refers to office buildings among the assets under management for the 3rd FP.
*3 These are the percentages when the area leased to tenants who had rent revisions (including new replacements) (approx. 4,165 tsubos) is deemed 100%.

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SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results - Upward Rent Revision (1) A-2

BREEZÉ TOWER (45% quasi co-ownership interest in sectional ownership of the office portion of the building, etc.)
1. Located in the Umeda area, a business
district representing Kansai
2. The property is equipped with rooftop
greening, green wall, photovoltaic
generation facilities, and other energysaving facilities. The property was rated
S rank (the highest rank) in the City ofOsaka’s Comprehensive Assessment
System for Building Environmental
Efficiency (CASBEE Osaka) and awarded“CASBEE Osaka of the Year 2008.”
3. The property is an informationtransmission base having “Sankei HallBREEZÉ” which inherits the DNA of“Sankei Hall,” a theater in Osaka which
opened in 1952.

Rate of rent increase
compared with before
Renewal with rent revision/renewal (15 cases, 362 tsubos)+10.1%
New replacements (2 cases, 226 tsubos)+46.8%
Effect of rent revision
Impact of DPU*1+48 yen

■ Map
Hotel
Granvia Osaka

Osaka Sta.

Umesankouji

Chuo Post Office

Hilton Plaza
East

Harton Hotel
Nishiumeda

Daiwa House
Industry

Hilton Osaka

Hilton Plaza
West

Osaka Mode
Gakuen

Herbis ENT

Exit 6-47(Underground)

Umeda
Daibiru
HerbisOsaka

Exit 10(Above Ground)

Osaka Ekimae Daiichi Building
OSAKA CENTRALPOST OFFICE

Sakurabashi

The Ritz Carlton,
Osaka*1 Calculated by converting the amount of increase in monthly rent and CAM revenue into that for the full period (6 months) anddividing it by the number of investment units issued and outstanding (356,800 units).
*2 Figures are rounded down to the indicated digits, and ratios are rounded off.

SubwayYotsubashi
Line

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SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results - Upward Rent Revision (2) A-8

Shinagawa Seaside TS Tower (25% quasi co-ownership interest in sectional ownership of the building, etc.)
1

2.

3.

The property is located at “Shinagawa
Seaside Forest,” which is made up of agroup of high-rise office buildings andlarge retail facilities resulting from a large
redevelopment
and
where
the
headquarters and back offices of IT
companies
andmanufacturers
concentrate.
The property is located a 1-minute walkfrom Shinagawa Seaside Station on theTokyo Waterfront Area Rapid Transit
Rinkai Line, enabling direct access to
Shibuya Station in approximately 15
minutes and to Shinjuku Station inapproximately 20 minutes. It also offers
favorable access to Haneda Airport andShinagawa Station on the Keikyu MainLine.
It has high building specifications with astandard floor area of approximately 446
tsubos, a ceiling height of 2,700 mm andraised floor of 100 mm.

Rate of rent increase
compared with before
Renewal with rent revision/renewal

Rent increase(Not disclosed)
Effect of rent revision
Impact of DPU*1+72 yen■ Typical Floor Plan (Approx. 446 tsubos)■ Shinagawa Seaside Forest Block Map
To Aomono-yokocho
To Yokohama

Kaigan-Dori St.

Prime Parks
ShinagawaSeaside The Tower

South
Tower

West
Tower

To Shinagawa

TSPark
Tower Tower

GenevaForestNursery

View Tower Ⅱ

ShinagawaSeaside Park

Oval Garden

View Tower
Ⅰ

East
Tower
SeasideEkimaeHiroba

Hitachi
HitachiSolutions Solutions
Tower A Tower B

ShinagawaSeaside Sta.

AEON Style
ShinagawaSeasideTo Tennozu*1 Calculated by converting the amount of increase in monthly rent and CAM revenue into that for the full period (6 months) and dividing it by the
number of investment units issued and outstanding (356,800 units).
*2 Figures are rounded down to the indicated digits.

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SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results - Implementation of Strategic Leasing  Diversification of contract termination period
A-4

S-GATE AKIHABARA: Also successfully increased the rent of all tenants (fixed-term building lease agreement)
After re-contract

Before re-contract

TenantTermination periodAA

8th FP

B

B

10th FPC

8th FP

D

D

10th FPE

E

11th FPF

12th FP

TenantTermination periodC

4th FP

Rate of rent increase
compared with before

Renewal with rent
revision/renewal+14.9%
New replacements+33.3%

 Rescheduling the cancellation notice period ahead of schedule for major tenants that concluded
ordinary building lease agreements
A-7

Toyo Park Building: Agreed to change the period from 6 months to 10 months prior to the cancellation
Scheduledcancellation period
X-12months

X-11

X-10

X-9

X-8

X-7

Secured a leasing activity
period of another4 months* Ratios are rounded to the indicated digits.

X-6

X-5

X-4

X-3

X-2

X-1

X

Before change: 6 months
before cancellation notice

After change: 10 months before
cancellation notice
19

SANKEI REAL ESTATE Inc.

MEMO

20

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy- Reduce Rent Gap through Upward Rent Revision, Continue to Aim for Internal Growth  Seizing internal growth opportunities while maintaining the relationship with tenants even amid the
COVID-19 pandemic■Status of Progress and Schedule of Contract■ Rent Gap*1 (for typical floorplate)
Revision/Renewal(As of end of August 2020)

9 office properties(Unit: tsubo)

6,000 tsubos-15.9%-12.0%

As of March 31, 2020

As of August 31, 2020

(on total rent basis; weighted average)

5,000 tsubos

4,969
4,969
(34.3%)(34.3%)

4,000 tsubos

3,000 tsubos

0%2,000 tsubos-5%-12.0%
1,000 tsubos-15.9%

Progress
rate*3

56.1%
56.1%

-10%
2021年2月期
4th FP February 2021)
4th FP (ending(ending February 2021)
（第4期）

-20%

Progress
rate*30.2%
0.2%

0 tsubos

-15%

1,279
1,279
(8.8%)(8.8%)

2021年8月期
5th
5th
FPFP
(ending Au(ending August 2021)（第5期）

契約更改・更新予定面積（総賃貸面積に占める割合）

2020年3月末日時点
As of March 31, 20202020年8月末日時点
As of August 31, 2020

*1 “Rent Gap” refers to the figure arrived at when the amount of difference between the
average rent for SANKEI REAL ESTATE’s office building portfolio and the market rent
calculated based on assumed new contract rent (typical floorplate) as stated in a market
report prepared by CBRE K.K. is divided by the market rent.

■ Revision/Renewal
Contract Revision/Renewal
4th FP
Areato(Ratio
TotalArea)
Leased
5th FPArea)*2■ Contract(Planned) Planned
Area (Ratio
Total toLeased
契約更改・更新済面積(ending
February2021)(ending
August2021)■
Contract
Revision/Renewal
Area■ Progress Rate of Contract Revision/Renewal (Planned) Area (Ratio to Total LeasedArea)*1 The leased area of the office buildings subject to “contract revision/renewal planned area” is thefigure corresponding to the ownership interest acquired by SANKEI REAL ESTATE in each property.
*2 “Ratio to total leased area” is the value calculated by dividing the total leased area for eachcontract revision/renewal period by the total leased area as of August 31, 2020, rounded to one
decimal place.
*3 “Progress rate” is the value calculated by dividing the total leased area for lease contracts that havebeen concluded as of August 31, 2020, and whose contract revision/renewal has been completed
by the total leased area for each contract revision/renewal period, rounded to one decimal place.

21

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy - Implementation of Strategic Leasing Office leasing market
Due to the impact of the COVID-19 pandemic
 Relaxation of supply-demand balance due to thedeterioration of business sentiment Structural change in demand due to the adoptionof remote work, etc.

Portfolio of SANKEI REAL ESTATE● Office buildings in prime locations*1● High-performance office buildings*2● Office buildings that meet remote work
demand*3

Wellbalanced
possession+

Average operating unit price that is lessexpensive than the market rent
 Decrease in rent-bearing capacity of tenants
・ ・ ・ Tenants with higher rent bear
more burden Increase in demand for satellite offices, etc.
・ ・ ・ Coexistence with office buildings incentral Tokyo

At this point, it is unlikely to be significantly impacted by the
COVID-19 pandemic anytime soon

Strategic leasing Leasing utilizing the customer base of the group companies, affiliated companies and network-relatedcompanies of Fuji Media Holdings
 We will negotiate rent increase with tenants with a rent gap (especially tenants who have concluded fixedterm building lease agreements)
 Diversification of contract period and rescheduling of cancellation notice period ahead of schedule based on
property characteristics and tenant attributes*1 Tokyo Sankei Building, BREEZÉ TOWER, Hibiya Sankei Building, S-GATE AKASAKA, S-GATE NIHONBASHI-HONCHO, and Hatchobori Sankei Building are the applicable properties.
*2 Tokyo Sankei Building, BREEZÉ TOWER, Shinagawa Seaside TS Tower, and the S-GATE Series (AKASAKA, NIHONBASI-HONCHO, AKIHABARA) are the applicable properties.
*3 Shinagawa Seaside TS Tower, Toyo Park Building, and Omori Park Building are the applicable properties.

22

SANKEI REAL ESTATE Inc.

3. External Growth Results and Strategy

23

SANKEI REAL ESTATE Inc.

3-1 External Growth Results - Acquired "S-GATE AKASAKA" (4th FP)  Acquired the first property in the S-GATE series under the sponsor branding strategy*1

Overview
Location

Minato-ku, Tokyo

Acquisition price4,200 million yen

Appraisal value

4,266 million yen

Appraisal NOI yield

3.3%

Construction completion

Jul. 2015

Ceiling height

2,800 mm

Floor load

500 kg/m²*1 SANKEI REAL ESTATE has acquired 60% quasi co-ownership interest inreal estate trust beneficiary rights.
*2 Figures are rounded down to the indicated digits.

1.

The property is a 1-minute walk from
Akasaka Station on the Tokyo Metro
Chiyoda Line, the nearest station, and is also
within walking distance of Tameike-sanno
Station, Akasaka-mitsuke Station, andNagatacho Station, with access to four
stations and six lines.

2.

Environmentally friendly Low-e paired glass,
LED lighting, and complete individual airconditioning systems are installed.

3.

In terms of business continuity plan (BCP)
measures, the property is equipped with an
emergency power generator, has two
separate power lines, has an emergency
storage facility on all floors except the firstfloor, and has an earthquake-resistant
structure with an earthquake resistance level
equivalent to 1.25 times that of the BuildingStandards Act. Although it is a mediumsized building, it boasts the same
specifications and equipment levels as aclass-A building.

Impact of DPU for 4th FP+115 yen*2■ Map

4. Acquired DBJ Green Building Certification"2017 4 Stars”(Certification destination: The Sankei Building
Co., Ltd.)24

SANKEI REAL ESTATE Inc.

3-1 External Growth Results - Portfolio After Acquisition of "S-GATE AKASAKA“ [As of October 1, 2020]
Number of properties

12 properties

Asset size

Approx. 71.5 billion yen(Total acquisition price)

Appraisal value*1

Approx. 80 billion yen

Acquisition price/property

Approx. 5.9 billion yen

Average appraisal NOI yield*2

4.3%

Occupancy rate*2

99.3%(as of the end of September 2020)

Portfolio PML value

1.7%

Sub assets
18.1%

Investment
Ratio byAsset Type(acquisition-pricebasis)

Office buildings
81.9%

Other
5.6%

Osaka
City
18.3%

Investment
Ratio byGeographic
Area

Close

Average walking time*3

2.6 minutes

New

Average building age*3

16.1 years(acquisition-pricebasis)

Large

Average typical floorplate*3

299 tsubos

Tokyo 23 wards
76.1%*1 The appraisal value is calculated based on net operating income derived by direct capitalization method, with the appraisal date on August 1, 2020, for S-GATE AKASAKA and August 31,
2020, for other properties.
*2 Ratios are rounded to the indicated digits.
*3 Weighted average based on acquisition price of each property is indicated, rounded to the indicated digits.

25

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy - External Growth Policy Will Remain Unchanged - Also realize abundant pipeline and aim for favorable opportunities of external growth through strong<Target asset size>
sponsor support

200 billion yen to
300 billion yen

Pipeline from Sponsor

Approx. 50 billion yen
to 100 billion yen<Target asset size>

Aim for inclusion in global
indexes

100 billion yen

FTSE EPRA/Nareit
Global Real Estate Index
FTSE Global All Cap Index

Launch a move to obtain
credit rating

71.5 billion yen
Around 0.5
to 1 year
第4期
4th FP
October 20202020年10月

短期目標
Short-term target* Asset size is based on acquisition price.
* The short-term and mid-term asset size targets above are solely the targets, and neither the achievement of the targets themselves nor the timing ofachievement are definite or guaranteed.
Furthermore, the timing of achievement of the targets may be delayed due to changes in the investment environment, real estate market conditions, etc.
and other reasons.

中期目標
Mid-term target

26

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy - Establish a High-Quality Portfolio through Strong Sponsor Support SANKEI REAL ESTATE's high-quality portfolio is supported by strong sponsor support

Sponsor support rate 100%
Close

New

Percentage by Walking
Time to the Nearest Station *1

Percentage by
Building Age *1

Within 1 minute 44%
Within 3 minutes 83%
Within 5 minutes 95%

More than 5 minutes
5.3%
More than 3 minutes,
but within 5 minutes
12.2%

Average*2

2.6 minutes
More than 1 minute,but within 3 minutes
38.4%

All Properties



Large

Percentage by
Typical Floorplate *1
Within 10 years 36%
Within 20 years 69%
Within 30 years 93%

Within
1 minute
44.1%

Average*2

Within
10 years
36.2%

100 tsubos
or more, but lessthan 200 tsubos
28.6%

16.1 years
More than
15 years,
but within
20 years
14.0%*3

Less than 100 tsubos
3.5%

More than 30 years
6.9%

More than 20 years,
but within 30 years
24.5%

Large-scale buildings 68%
Large buildings
96%

More than
10 years, but
within 15 years
18.3%

All Properties*1 Calculated based on the acquisition price of each owned property as of October 1, 2020 (including S-GATE AKASAKA).
*2 Figures are the weighted average based on the acquisition prices (rounded to the indicated digits).
*3 Calculated based on the definition of "Large-scale buildings: 200 tsubo or more" and "Large buildings: 100 tsubo or more, but less than 200 tsubo"
made by Sanko Estate Co., Ltd.

400 tsubos
or more 43.8%

Average*2

299 tsubos
200 tsubos
or more,but less than 300 tsubos
300 tsubos or more, but less14.9%
than 400 tsubos
9.2%

Office Buildings Only
27

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy

Being Aware of the Balance of Portfolio Matrix (1) Proactively promote diversification by geographic area that contributes to improvement in portfolio NOI
yield, mainly in metropolitan areas<Cap. Rate (Appraisal NOI Yield) x Area x Acquisition price>
Area
Low

0

Tokyo 23 wards(Otherthan central 3
2
wards
of Tokyo)

Central 3 wards of Tokyo(Chiyoda, Chuo, and Minato
wards)
1

2.5%

3.0%

Cap. Rate

3.5%

S-GATE AKASAKA
Typical floorplate
158 tsubos
5 years old
1-minute walkTokyo Sankei Building
Typical floorplate
536 tsubos
20 years old
1-minute walk

4.5%

5.0%

5.5%

S-GATENIHONBASHI-HONCHO

HibiyaSankei Building
Typical floorplate
105 tsubos
28 years old
1-minute walk
S-GATE AKIHABARA
Typical floorplate74 tsubos
3 years old
5-minute walk

Typical floorplate
186 tsubos
1 year old
4-minute walk

Hatchobori Sankei Building
Typical floorplate
201 tsubos
55 years old
3-minute walk

(Excluding
Tokyo)
3

Osaka City
Nagoya4City

Office buildings

Other ordinancedesignated cities
Core cities, major 5
regional cities

Sub assets*The size of bubble depends on the acquisition priceHotel Intergate
Tokyo Kyobashi
2 years old
1-minute
walk

4.0%

Greater Tokyo

Shinagawa Seaside
TS Tower
Typical floorplate
446 tsubos
17 years old
1-minute walk

Omori Park Building
Typical floorplate342 tsubos
29 years old
3-minute walkToyo Park Building
Typical floorplate
219 tsubos
29 years old
9-minute walk

BREEZÉ TOWER
Typical floorplate
406 tsubos
12 years old
3-minute walkHotel Intergate
Hiroshima
1 year old
3-minute
walkHigh 6.0%
28

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy

Being Aware of the Balance of Portfolio Matrix (2)<Cap. Rate (Appraisal NOI Yield) x Area>

Area(Unit: million yen)

Area

Appraisal
NOI
CAP

Less than
3.0%
Less than
3.5%

Central 3 wards of Tokyo

Tokyo 23 wards(Chiyoda, Chuo, and Minato wards)(Other than the central 3 wards of Tokyo)

Property name
Building age, walking
time from station

Greater Tokyo(Excluding
Tokyo)

Property nameAcquisition price(million yen)

Building age, walking
time from station

Osaka City

Other ordinance-designated cities

Total acquisition
price

Nagoya City

Core cities, major regional cities(Overall ratio)

Property name
Building age, walking
time from station

Acquisition price(million yen)

Property nameAcquisition price(million yen)

Building age, walking
time from station

Acquisition price(million yen)

Tokyo Sankei Building

2,509

20 years old,
1-minute walk

(3.5%)

2,509

S-GATE AKASAKA
5 years old,
1-minute walk

4,200

4,200

(5.9%)

Hibiya Sankei Building

Cap. Rate

28 years old,
1-minute walkLess than
4.0%

5,829

S-GATE NIHONBASHIHONCHO

21,488

1 year old,
4-minute walk

(30.0%)

6,698

Hotel Intergate Tokyo Kyobashi
2 years old,
1-minute walk

8,961

S-GATE AKIHABARA
3 years old,
5-minute walk

Shinagawa Seaside TS Tower
2,055

17 years old,
1-minute walk

10,040Omori Park Building

Less than
4.5%

27 years old,
3-minute walk

21,2775,400(29.7%)

Toyo Park Building
29 years old,
9-minute walk

3,782

Less than
5.0%
5.0%
or moreTotal
acquisition
price(Overall ratio)

Hatchobori Sankei Building
55 years old,
3-minute walkHotel Intergate Hiroshima

3,990

1 year old,
3-minute walk

(5.6%)BREEZÉ TOWER
12 years old,
3-minute walk

4,959

35,211

19,222(49.2%)(26.9%)-

3,990

18,05913,100(25.2%)

13,1003,990

71,525(18.3%)(5.6%)(100.0%)

Typical Floorplate * Office Buildings Only
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than 100
tsubos29

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy

Being Aware of the Balance of Portfolio Matrix (3)<Typical floorplate x Area>

Area(Unit: million yen)

Area

Typicalfloorplate(tsubo)Typical floorplate (tsubo)

400 tsubos
or moreLess than
400 tsubos
300 tsubos
or moreLess than
300 tsubos
200 tsubos
or moreCentral 3 wards of Tokyo

Tokyo 23 wards(Chiyoda, Chuo, and Minato wards)(Other than the central 3 wards of Tokyo)

Property name

Property name

Building age, walking
time from station

Acquisition price(million yen)

2,509

Hatchobori Sankei
Building
55 years old,
3-minute walk

Acquisition price(million yen)

17 years old,
1-minute walkOsaka City

Other ordinance-designated cities

Total acquisition
price

Nagoya City

Core cities, major regional cities(Overall ratio)

Property name

Property name

Building age, walking
time from station

Shinagawa Seaside
TS Tower

Tokyo Sankei Building
20 years old,
1-minute walk

Building age, walking
time from station

Greater Tokyo(Excluding
Tokyo)

Acquisition price(million yen)

Acquisition price(million yen)

BREEZÉ TOWER
12 years old,
3-minute walk

10,04025,64913,100(35.9%)

Omori Park Building

5,400

27 years old,
3-minute walk

(7.6%)

5,400

Toyo Park Building
4,959

Building age, walking
time from station

29 years old,
9-minute walk

3,782

Hotel Intergate Hiroshima

12,731

1 year old,
3-minute walk(17.8%)

3,990

S-GATE NIHONBASHIHONCHO

1 year old,
4-minute walk

6,698

Hibiya Sankei Building
Less than
200 tsubos
100 tsubos
or more28 years old,
1-minute walk

5,829

25,688S-GATE AKASAKA
5 years old,
1-minute walk

(35.9%)
4,200

Hotel Intergate Tokyo Kyobashi
2 years old,
1-minute walkLess than
100 tsubos

8,961

S-GATE AKIHABARA

2,055

3 years old,
5-minute walk

(2.9%)

2,055

Total
acquisition
price40,611

13,822(Overall ratio)(56.8%)(19.3%)-

13,1003,990

71,525(18.3%)(5.6%)(100.0%)

Typical Floorplate * Office Buildings Only (Construction area is used as reference value for hotels)
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than 100
tsubos30

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy - Realize Abundant Pipeline (Approx. 50 to 100 billion yen)  Sub-assets are also being accumulated, centering on office buildings (main properties are listed)
Hareza Tower

Shinagawa Seaside TS Tower

Overview

Overview

Location

Higashi-Ikebukuro, Toshima-ku,
Tokyo

Location

Higashi-Shinagawa, Shinagawa-ku,
TokyoConstruction completion

May 2020

Construction completion

Jul. 2003

Total floor area

Approx. 68,600 m²

Total floor area

Approx. 52,977 m²

Number of floors

33 floors above ground and 2 floors
below groundNumber of floors

25 floors above ground and 2 floors
below groundOtemachi Financial City North Tower

Honmachi Sankei Building

Overview
Location

Otemachi, Chiyoda-ku,
TokyoConstruction completion

Oct. 2012

Total floor area

Approx. 110,000 m²

Number of floors

31 floors above ground, 4 floors
below ground and 2-story
penthouse

Overview
Location

Honmachi, Chuo-ku, Osaka-shi,
Osaka

Construction completion

Aug. 2021 (planned)

Total floor area

30,095 m² (planned)

Number of floors

21 floors above ground

S-GATE HATCHOBORI
Overview
Location

Hatchobori, Chuo-ku, Tokyo

Construction completion Feb. 2020
Total floor area

Approx. 3,920 m²

Number of floors

10 floors above ground31

SANKEI REAL ESTATE Inc.

4. Financial Strategy

32

SANKEI REAL ESTATE Inc.

Financial Strategy - Financing Highlights (1) - Maintained a More Stable Financial Base Through Lender Composition Centering on Mega Banks
Lender Composition (as of October 1, 2020)

Financing Highlights (as of October 1, 2020)
Balance of interestbearing liabilities

37.8 billion yen

LTV*1

47.0%

Ratio of long-term
debt*2

75.9%

Ratio of fixedinterest rate

60.3%

Average financing
interest rate*3

0.32%

Average remaining
time to maturity

LTV

44.0%

End of 4th FP
46.9%(Forecast)[Unit: million yen]

Borrowingamount2.1 years

LTV Ratio During Normal Operations
End of 3rd FP

Stable bank formation through financing from
7 leading financial institutions of JapanEnd of 5th FP
46.8%(Forecast)

Percentage

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.

13,400

35.4%

6,500

17.2%

5,600

14.8%

Mizuho Trust & Banking Co., Ltd.

3,540

9.4%

Sumitomo Mitsui Trust Bank, Ltd.

3,200

8.5%

Shinsei Bank, Limited

2,780

7.4%

Resona Bank, Ltd.

2,780

7.4%

37,800100.0%

7 banks in total*1 “LTV ratio” is total interest-bearing liabilities divided by total assets, rounded to one decimal place.
*2 “Long-term debt ” used in the calculation of the “Ratio of long-term debt” does not include long-term borrowings due within one year.
*3 “Average financing interest rate” is the average of applicable interest rates at October 1, 2020. Calculations are on an interest payable basis and do not include arrangement fee and other borrowing
related expenses.

33

SANKEI REAL ESTATE Inc.

Financial Strategy - Financing Highlights (2) - Continue to promote the diversification of maturity ladderMaturity Ladder for Interest-Bearing Liabilities (as of October 1, 2020)
 Conducted refinancing in the 3rd FP
 Conducted borrowing related to the acquisition of
Short-term → Long-term"S-GATE AKASAKA“ in the 4th FP (October 1, 2020)
4.3 billion yen
Long-term borrowings
Fixed interest rate,
4.5 years

4.3 billion yen
Short-term borrowings
Floating interest rate

4.3 billion yen
Short-term borrowings
Floating interest rate

(Unit: million yen)

7,000

6,000
5,900

5,900

5,600
5,000
4,800
4,000

4,300

4,300
4,300

3,700

3,000

3,300

2,000

1,000

0
3rd FP

4th FP

5th FP

Short-term borrowings

6th FP

7th FP

8th FP

Long-term borrowings

9th FP

10th FP

11th FP

12th FP34

SANKEI REAL ESTATE Inc.

5. ESG Initiatives

35

SANKEI REAL ESTATE Inc.

ESG Initiatives (1)Environment (1) Received DBJ Green Building Certification, which certifies properties that give proper careto the environment and society, for 5 properties (including 3 properties for which the sponsor received
certification) among 12 properties under management
A-3 S-GATE NIHONBASHI-HONCHO

A-4 S-GATE AKIHABARA(51% co-ownership interest)

Recipient: SANKEI REAL ESTATE Inc.

A-1 Tokyo Sankei Building(2% co-ownership interest)

Recipient: The Sankei Building Co., Ltd. (sponsor)

Recipient: SANKEI REAL ESTATE Inc.

BREEZÉ TOWER

A-2 (45% quasi co-ownership interest in sectional ownership of theoffice portion of the building, etc.)

Recipient: The Sankei Building Co., Ltd. (sponsor)

A-10 S-GATE AKASAKA(60% quasi co-ownership interest)

Recipient: The Sankei Building Co., Ltd. (sponsor)

36

SANKEI REAL ESTATE Inc.

ESG Initiatives (2)Environment (2) Approximately 30% of LED conversion is in progressing at both theexclusively owned areas and common areas of office buildings
Major environmental initiatives[Tokyo Sankei Building] Installed energy-saving and long-life LED lighting Sequentially introduced LED lighting and dimming control systems that realize
further energy saving and cost saving from highly efficient inverter (Hf) fluorescentlamps that were the basic specification until now It is possible to narrow down the necessary lighting areas by increasing the numberof dimming and blinking sections and realized efficient energy saving.
 Maintenance of electric vehicle (EV) chargers
 Installed electric vehicle (EV) chargers in the parking lot as part of Sankei Building's
environmental protection measures[BREEZÉ TOWER] Reduction of building heat load Improvement of comfort and reduction of solar heat with double skin/Low-e glass Effective use of natural energy
 Adopts automatic dimming control with the use of daylight and correction of initial
illuminance Achievement of energy saving using outside air-cooling system in the middle period
and winter Use of indirect light with blind automatic control system
 Solar power system Natural ventilation system using natural, ventable façade Effective use of water resources and consideration to the surrounding environment Reuse of rainwater and drainage (use as toilet washing water and automatic
irrigation for planting) Water-saving effect with the adoption of water-saving equipment[S-GATE Series] Realized rooftop greening and established a terrace. Taking an open and brightapproach by using greenery also at the entrance

37

SANKEI REAL ESTATE Inc.

ESG Initiatives (3)Social Response to the COVID-19 pandemic
Prevention
 Introduce remote work and staggered commuting
 Prepare alcohol disinfectants at common areas
 Health management of property management staff
 Display posters for preventing the spread of infection
When someone is infected with COVID-19
 Identify the behavioral history of infected persons and persons
who had close contact with them Implement disinfection work at the office and common areas
 Contact the tenants, etc. who use the building Relationship with stakeholders
Measures for employees
 Develop a comfortable office environment Human resource development: Implement
various trainings
 Work-style support: Support for childcare andnursing care
Measures for tenants
 Implement disaster prevention drills, distributedisaster prevention goods
 Conduct tenant satisfaction survey
Connection with the community Holding various events38

SANKEI REAL ESTATE Inc.

ESG Initiatives (4)Governance (internal control)Sponsor Commitment: Promotion of Same-Boat Investment by Sponsor
 Sankei Building, the sponsor, conducted additional acquisition of the investment units of SANKEI REAL ESTATE in the 3rd FP
 Same-boat investment with the unitholders of SANKEI REAL ESTATE will further increase, and strong sponsor support contributing to
the medium- to long-term growth of SANKEI REAL ESTATE is expected
End of 2nd FP

Additionallyacquired units

Number of investment units
issued and outstanding

356,800 units-

356,800 units

Number of units held bysponsor

11,362 units

3,617 units

14,979 units

3.18%

1.01%

4.19%

Percentage of units held bysponsorEnd of 3rd FP

Participation in GRESB (scheduled for 2021)


SANKEI REAL ESTATE started preparations to participate in GRESB Real Estate Assessment, a global investment benchmark. GRESB wasestablished as a tool to measure the environmental, social, and governance (ESG) consideration of companies and funds in the real estate
sector and is used to select investment targets and engage in dialogue with investment targets. Currently, we are promoting the formulation ofvarious plans and policies for the participation next year.
Roadmap for participation in GRESB

Item

2021

2020
Q4

Q1

Q2

Q3

Formulation of various plans and policies regarding
sustainability
Implementation of training for employees engaged
in sustainability
2021 GRESB Assessment★ Submission

39

SANKEI REAL ESTATE Inc.

Appendix40

SANKEI REAL ESTATE Inc.

3rd Fiscal Period (Ended Aug. 2020) Balance Sheet (unabridged)(Unit: thousand yen)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets

3,876,992
3,283,341
87,95751,898567,790
7,867,979

165,538(8,698)156,839
353
(12)
340
2,457,766
13,624,054(547,766)
13,076,288
22,236(813)
21,422
2,608
(208)
2,400
25,419(1,901)
23,51852,510,871
330
68,249,777

Liabilities
Current liabilities
Operating accounts payable
Long-term borrowings due within one year
Accounts payable - otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

205,1284,800,000
214,600
26,272893
129,470
328,557
1,205,174
6,910,097
28,700,000
92,935
3,047,718
31,840,654
38,750,751

36,540,901
903,625
903,625
37,444,526
37,444,526
76,195,278

6,713
6,713
60,79314
10,00070,80768,327,298
76,195,278

41

SANKEI REAL ESTATE Inc.

3rd Fiscal Period (Ended Aug. 2020) Statement of Income (unabridged)(Unit: thousand yen)
Operating revenue
Leasing business revenue
Other leasing business revenue
Total operating revenue

1,878,684
126,823
2,005,507

Operating expenses
Expenses related to leasing business

778,934

Asset management fee

183,485

Asset custody fee

1,505

Administrative service fees

6,370

Remuneration for directors (and other officers)

3,600

Other operating expenses

35,230Total operating expenses

1,009,126

Operating profit

996,380

Non-operating income
Interest income

32Interest on refund

323

Total non-operating income

356

Non-operating expenses
Interest expenses

58,586

Borrowing related expenses

33,790Total non-operating expenses

92,377

Ordinary profit

904,359

Net profit before income taxes

904,359

Income taxes - current
Income taxes - deferred
Total income taxes
Net profit
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

898
2
901
903,458167
903,625

42

SANKEI REAL ESTATE Inc.

3rd Fiscal Period (Ended Aug. 2020) Statement of Cash Flows(Unit: thousand yen)
Cash flows from operating activities
Net profit before income taxes

904,359

Depreciation

220,471

Interest income
Interest expenses(32)
58,586

Decrease (increase) in operating accounts receivable(23,792)

Decrease (increase) in consumption taxes refund receivable

369,256

Decrease (increase) in prepaid expenses(10,700)

Increase (decrease) in operating accounts payable

58,297

Increase (decrease) in accounts payable - other

52,356

Increase (decrease) in consumption taxes payable

129,470

Increase (decrease) in advances received(12,866)

Increase (decrease) in deposits received

254,170

Decrease (increase) in long-term prepaid expenses(915)

Decrease (increase) in other assets(225,717)

Subtotal

1,772,944

Interest received

Interest paid
Income taxes paid
Cash flows from operating activities

32(57,188)(951)
1,714,837

Cash flows from investing activities
Purchase of property, plant and equipment(5,747)Purchase of property, plant and equipment in trust(46,376)

Proceeds from leasehold and guarantee deposits received
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received in trust
Refund of leasehold and guarantee deposits received in trust
Cash flows from investing activities

1,400
(502)
142,697(8)
91,461

Cash flows from financing activities
Repayments of short-term borrowings(4,756,000)

Proceeds from long-term borrowings

4,300,000

Distribution paid

(1,067,674)

Cash flows from financing activities

Net increase (decrease) in cash and cash equivalents(1,523,674)

282,624

Cash and cash equivalents at beginning of period

6,877,708

Cash and cash equivalents at end of period

7,160,333

43

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs)
3rd FP(Ended Aug. 2020)(against total assets)

3rd FP(Ended Aug. 2020)

44.0%

Distribution per unit

40.0%

Distribution yield

5.6%(against book value)

4.2%

ROE

4.8%

(against appraisal value)

3.8%

Net assets per unit

104,945 yen(against book value)

3.6%

NAV per unit

126,023 yen(against appraisal value)

3.2%

Investment unit price (at end of period)

90,800 yen(NOI yield)

4.7%

NAV multiple

0.7x(NOI yield after
depreciation)

4.0%

PBR

0.9x

FFO

1,122 million yen

PER

17.9x

AFFO

1,068 million yen

FFO multiple

14.4x

LTV

(against total assets<considering unrealized
gain/loss>)

2,532 yen

NOI yield

NOI yield after depreciation

Implied cap rate

FFO per unit

3,147 yen

(FFO)

80.4%

(AFFO)

84.5%

Payout ratio
EPS

2,532 yen

*1. LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities / (Total assets(book value) + unrealized gain/loss)*2. NOI yield (against book value) = (Operating income from real estate leasing + Depreciation) /Book valueof real estate for lease
NOI yield (against appraisal value) = (Operating income from real estate leasing + Depreciation) /Appraisal value of real estate for lease*3. NOI yield after depreciation (against book value) = Operating income from real estate leasing / Book
value of real estate for lease
NOI yield after depreciation (against appraisal value) = Operating income from real estate leasing /Appraisal value of real estate for lease*4. Implied cap rate (NOI yield) = NOI (Annualized result of current FP x 2) / (Total fair value +Interestbearing liabilities – Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Result of current FP x2) / (Total
fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)*5. FFO = Net profit + Depreciation – Gain/loss on sales of real estate properties (including loss onretirement of non-current assets)*6. AFFO = FFO – Capital expenditure*7. FFO per unit = FFO / Total number of investment units issued and outstanding at end of period*8. EPS = Net profit / Total number of investment units issued and outstanding at end of period*9. Distribution per unit = Total distribution / Total number of investment units issued andoutstanding at end of period*10. Distribution yield = Distribution per unit (Annualized result of current FP x 2) /Investment unit price (at end of period)*11. ROE (Return on equity) = Net profit (Annualized most recent result x 2) / Net assets*12. NAV per unit = (Net assets + Unrealized gain/loss) / Total number of investment units
issued and outstanding at end of period*13. NAV multiple = Investment unit price (at end of period) / NAV per unit
*14. PBR (Price Book-value Ratio) = Investment unit price (at end of period) / Net assets perunit*15. PER (Price Earnings Ratio) = Investment unit price (at end of period) / EPS (Annualized
most recent result x 2)
*16. FFO multiple = Investment unit price / FFO per unit (Annualized most recent result x 2)
*17. Payout ratio (FFO) = Total distribution / FFO*18. Payout ratio (AFFO) = Total distribution / AFFO.
*19. Figures are rounded down to the indicated digits. (Percentages and multiples arerounded to one decimal place.)

44

SANKEI REAL ESTATE Inc.

Status of Lenders (as of October 1, 2020)
LenderBorrowingamount(million yen)Interest rate(※1)

Maturity
date(※2)

Repayment
methodDescription

Mizuho Bank, Ltd.

4,300

0.21000%(floating)

October 1,
2021

Lump-sum
repayment atmaturity

Unsecured
Nonguaranteed

Subtotal

4,300

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Shinsei Bank, Limited

1,331

Long-term borrowings

Resona Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Shinsei Bank, Limited

Term

929
796
509

0.24409%(floating)March 12,
2021

Resona Bank, Ltd.

465
385
385
1,574
1,084
929

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Shinsei Bank, Limited

Long-term borrowings

Short-termborrowingTerm

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Shinsei Bank, Limited

Borrowingamount(million yen)

350

620
550
490

392

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Shinsei Bank, Limited

439

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Shinsei Bank, Limited

972

Resona Bank, Ltd.

324

0.42346%(fixed)March 12,
2023

358
324

*1. Interest rates indicated are the applicable interest rates as of October 1, 2020.
*2. If the maturity date is not a business day, it will be the following business day.

800
2,000
620

0.36200%(fixed)September
3, 2023

0.32923%(fixed)September
12, 2024

550
490
490
1,167
832
713
456
416
358

Resona Bank, Ltd.

358

Subtotal

33,500Total

Unsecured
Nonguaranteed

1,500

614

Resona Bank, Ltd.

Lump-sum
repayment atmaturity

294
2,250

Resona Bank, Ltd.

439

September
3, 2022

294

716

542

0.26909%(floating)

319

950

593

Unsecured
Nonguaranteed

March 12,2024

Description

548

490

Lump-sum
repayment atmaturity

0.49096%(fixed)Repayment
method639

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Ltd.
Shinsei Bank, Limited

March 12,2022

Maturity
date
(※2)

856

Resona Bank, Ltd.

0.36969%(fixed)Interest rate(※1)

37,80045

SANKEI REAL ESTATE Inc.

3rd Fiscal Period (Ended Aug. 2020) Statement of Income from Leasing by Property(Unit: thousand yen)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

BREEZÉ TOWER

S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

Property name

Leasing business revenue

Tokyo
Sankei Building

58,324

496,859

149,062

58,546

209,479

178,591

Rental revenue

49,365382,066

141,91955,532

183,186

147,630

CAM revenue

2,635

87,841--

13,232

13,790Utilities reimbursement

4,696

18,589

4,070

2,596

9,989

9,087

Parking revenue

786

6,860

2,934

372

1,932

6,626

Other rental revenue

839

1,502

137

45

1,140

1,456

38,651217,92243,03321,51386,59868,584

Outsourcing expenses

6,125

74,131

8,202

5,778

15,12816,923

Utilities expenses

3,638

35,429

4,973

2,633

8,904

11,066

Property taxes

12,557

37,132

10,741

4,775

53,909

9,723

683

1,135

-

-

-

-

Repair expenses

10,010

3,817

-

12

2,557

13,941

Insurance premium

114

933

295

145

315

480

-

250

250

250

450

450

3,183

63,14318,036

7,623

4,966

15,544

2,338

1,948

534

294

366

454

19,672278,937

106,028

37,032

122,881

110,006

22,856

342,081

124,065

44,656

127,848

125,551

Expenses related toleasing businessLand rent

Trust fee
Depreciation

Other expenses fromleasing
Operating income (loss)
from leasing
NOI*1 The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not beenobtained from the tenant, relevant party, etc. or information from which confidential information can be derived.
*2 Figures are rounded down to the indicated digits.

46

SANKEI REAL ESTATE Inc.

3rd Fiscal Period (Ended Aug. 2020) Statement of Income from Leasing by Property(Unit: thousand yen)
Property number

A-7

A-8

A-9

B-1

B-2

Asset type

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property name

Toyo
Park Building

Shinagawa Seaside
TS Tower*1

Omori
Park Building

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

Leasing business revenue

Total

108,549

166,087

206,955

118,800

Rental revenue

77,617132,145

206,955

118,800

CAM revenue

19,78814,268--

Utilities reimbursement

8,715

13,489--Parking revenue

2,340

5,400

-

-

88

782

-

-

65,90254,44543,57014,021

1,200

1,800

Other rental revenue
Expenses related to leasing
business

35,327

Outsourcing expenses

9,685

Utilities expenses

6,979

17,601--

Property taxes

7,634

16,29725,62915,388----

Repair expenses

706

1,563

-

-

Insurance premium

260

504

552

506

Trust fee

350

350

250

250

15,215

26,77025,572

348

43

52

Land rent

Depreciation
Other expenses fromleasing
Operating income (loss)
from leasing
NOI

9,486

(Not
disclosed)

29,986

225(Not
disclosed)

219,531

73,221150,868

100,184

152,50975,2291,226,572

82,708

180,854

115,399

179,279

100,801

1,446,103*1 The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not beenobtained from the tenant, relevant party, etc. or information from which confidential information can be derived.
*2 Figures are rounded down to the indicated digits.

47

SANKEI REAL ESTATE Inc.

Portfolio List (1) (as of October 1, 2020)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHI-HONCHO

S-GATE AKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building(2% co-ownershipinterest)(45% quasi co-ownershipinterest in sectional
ownership of the officeportion of the building,etc.)(51% co-ownershipinterest)

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Acquisition dateMar. 12, 2019

① Mar. 12, 2019
② Sep. 3, 2019*1

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Acquisition price

2,509 million yen

13,100 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

Appraisal value*2

2,690 million yen

17,100 million yen

7,470 million yen

2,530 million yen

6,530 million yen

5,570 million yen

2.8%

5.4%

3.8%

4.4%

3.7%

5.1%

Construction completion

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Occupancy rate
(as of September 30, 2020)

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%PML value

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

Location

Appraisal NOI yield(Appraisal NOI/Acquisition price)*1 The first acquisition of BREEZÉ TOWER was made on March 12, 2019, and the second acquisition on September 3, 2019.
*2 The appraisal date of the appraisal value is August 31, 2020.

48

SANKEI REAL ESTATE Inc.

Portfolio List (2) (as of October 1, 2020)
Property number

A-7

Asset type

Property name

A-8

A-9

A-10

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Toyo Park Building

Shinagawa Seaside
TS Tower

S-GATE AKASAKA

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

Omori Park Building(25% quasi co-ownershipinterest in sectional
ownership of the building,
etc.)

B-1

B-2

(60% quasi co-ownershipinterest)

Location

Koto-ku, Tokyo

Shinagawa-ku, Tokyo

Ota-ku, Tokyo

Minato-ku, Tokyo

Chuo-ku, Tokyo

Naka-ku, Hiroshima-shi

Acquisition dateMar. 12, 2019

Sep. 3, 2019

Sep. 3, 2019

Oct. 1, 2020

Mar. 12, 2019

Sep. 3, 2019

Acquisition price

3,782 million yen

10,040 million yen

5,400 million yen

4,200 million yen

8,961 million yen

3,990 million yen

Appraisal value*1

3,950 million yen

11,000 million yen

5,620 million yen

4,266 million yen

9,140 million yen

4,170 million yen

4.4%

4.3%

4.2%

3.3%

3.9%

4.9%

Construction completion

Jun. 1991

Jul. 2003

May 1993

Jul. 2015

Jan. 2018

Oct. 2018

Occupancy rate
(as of September 30, 2020)

100.0%

100.0%

94.3%

100.0%

100.0%

100.0%PML value

9.0%

3.2%

5.6%

4.6%

1.8%

2.1%

Appraisal NOI yield(Appraisal NOI/Acquisition price)

PML value (average)

1.7%*1 The appraisal date of the appraisal value is August 1, 2020, for S-GATE AKASAKA and August 31, 2020, for other owned properties.

49

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value at the End of 3rd Fiscal Period(Unit: million yen)

Property
number

Property nameAcquisition
price

End of 3rd FP
Book value

At acquisition*1

End of 3rd FP*2

(a)

(August 31, 2020) (b)Appraisal
CR*3
value

Appraisal
value

CR*3

ChangeUnrealized
gain/loss(b)-(a)Appraisal
value

CR*3

A-1

Tokyo Sankei Building(2% co-ownership interest)

2,509

2,614

2,540

2.6%

2,690

2.5%

150

-0.1pt75

A-2

BREEZÉ TOWER(45% quasi co-ownership interest in sectional
ownership of the office portion of the building,etc.)

13,10013,18013,905

3.9%

17,100

3.8%

3,195

-0.1pt3,919

A-3

S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

6,698

6,743

6,780

3.7%

7,470

3.3%

690

-0.4pt726

A-4

S-GATE AKIHABARA

2,055

2,066

2,080

3.8%

2,530

3.5%

450

-0.3pt463

A-5

Hibiya Sankei Building

5,829

6,035

5,900

3.3%

6,530

3.0%

630

-0.3pt494

A-6

Hatchobori Sankei Building

4,959

5,034

5,020

4.2%

5,570

4.1%

550

-0.1pt535

A-7

Toyo Park Building

3,782

3,888

3,790

4.2%

3,950

4.0%

160

-0.2pt61

A-8

Shinagawa Seaside TS Tower(25% quasi co-ownership interest in sectional
ownership of the building, etc.)

10,040

10,15910,200

3.6%

11,000

3.6%

800

0.0pt

840

A-9

Omori Park Building

5,400

5,493

5,600

3.9%

5,620

3.8%

20

-0.1pt126

54,37455,21755,815

Office buildings subtotal (total of 9 properties)

62,460

6,645

7,242

B-1

Hotel Intergate Tokyo Kyobashi

8,961

9,031

9,070

3.8%

9,140

3.7%

70

-0.1pt108

B-2

Hotel Intergate Hiroshima

3,990

4,000

4,080

4.6%

4,170

4.5%

90

-0.1pt169

Sub assets subtotal (total of 2 properties)

12,951

13,032

13,15013,310160

277

Portfolio total (total of 11 properties)

67,32568,24968,96575,770

6,805

7,520

*1. The appraisal value with October 31, 2018, as the appraisal date is indicated for A-1, A-3 to A-7, and B-1, appraisal value with July 1, 2019, as the appraisal date for A-8, A-9, and B-2, andthe total appraisal value with October 31, 2018, and July 1, 2019, as the appraisal date for A-2.
*2. The appraisal value with August 31, 2020, as the appraisal date.
*3. CR is a cap rate based on direct capitalization method (NCF basis). For the CR at the time of acquisition of BREEZÉ TOWER, the weighted average based on each acquisition price of the quasi
co-ownership interest in sectional ownership of the office portion of the building, etc. acquired on March 12, 2019, and September 3, 2019, is stated.

50

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area (as of August 31, 2020)

Business type

Total leased
area
(m2)

% of portfolio’s
total leased
area

Hotel

15,166.7

24.1%

Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

Manufacturing

Not disclosed

Not disclosed

Shinagawa Seaside TS Tower

Manufacturing (food)Not disclosed

Not disclosed

BREEZÉ TOWER

Manufacturing(pharmaceutical)

Not disclosed

Not disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

4.0%

S-GATE NIHONBASHI-HONCHO

Hitachi Real Estate Partners, Ltd.

Real estate

2,423.0

3.8%

Toyo Park Building

1,509.7

2.4%

Omori Park Building

1,429.4

2.3%

Omori Park Building

Not disclosed

Not disclosed

1,131.0

1.8%

Omori Park Building

1,131.0

1.8%

Omori Park Building

Name of end tenant

GRANVISTA Hotels & Resorts Co., Ltd.
Sony Corporation
NH Foods Ltd.
Bayer Yakuhin, Ltd.

Toyo Sangyo Co., Ltd.
NEC Facilities, Ltd.
Yokogawa Solution Service Corporation
SEGA GROUP CORPORATION

Daiichi Techno Co., Ltd.

Service(equipment maintenance)

Service(facility management)

Service(equipment maintenance)

Manufacturing(game)

Service(equipment maintenance)

Property nameBREEZÉ TOWER* “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
* “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to one decimal place.
* With regard to “Total leased area” and “% of portfolio’s total leased area,” for properties for which Sankei Building is the master lessee, the areas stated in the lease agreements which Sankei
Building (the master lessee) has concluded with end tenants are used as areas leased to the end tenants when calculating.
* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc.
or information from which confidential information can be derived.

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SANKEI REAL ESTATE Inc.

Status of Lease Agreements (as of August 31, 2020; based on leased area after considering ownership interest) Breakdown of Tenants by Lease Period(including hotels)

 Breakdown of Tenants by Contract Form
Ordinary building
lease agreement

Less than 3 years

28.8%

33.1%

10 years or more

29.7%

Average*1

7.8 years
66.9%
Fixed-term building
lease agreement

3 years or more,
but less than 5 years

5 years or more,
but less than 10 years

 Breakdown of Tenants by Lease Period(excluding hotels)

 Breakdown of Tenants by Business Type

10 years or more

Other 3.0%

Transportation & communications 3.1%

16.0%

25.5%

Wholesale & retail 3.7%

7.4%

IT 5.9%Manufacturing
Construction & real estate

10.0%Service Toyo Sangyo
 NEC Facilities
 Yokogawa Solution Service
Etc.

37.1%

 Sony NH Foods
 Bayer Yakuhin
Etc.

Less than 3 years

37.9%

21.1%

5 years or more,
but less than 10 years

Average*1

3.9 years

13.2%
24.1%
Hotel

33.6%

3 years or more,
but less than 5 years

 GRANVISTA Hotels & Resorts(100% subsidiary of Sankei Building)*1. Figures are the weighted average based on the area leased to each tenant.
*2. As to the calculation of each ratio indicated above, for properties for which Sankei Building is the master lessee, the areas stated in thelease agreements which Sankei Building (the master lessee) has concluded with end tenants are used as areas leased to the end tenants
when calculating.

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SANKEI REAL ESTATE Inc.

Status of Unitholders

Breakdown of Investment Units by Unitholder Type

Major Unitholders (as of August 31, 2020)

Financial institutions
Securities companies
Other Japanese corporations
金融機関
証券会社
その他国内法人
外国法人等
個人・その他
Non-Japanese corporations, etc.
Individuals/Other

Number ofunits owned(units)Share of units
owned
(%)

The Master Trust Bank of Japan, Ltd. (Trust Account)

72,762

20.39

Custody Bank of Japan, Ltd. (Trust Account)

61,37217.20

60%

The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

27,269

7.64

50%

Custody Bank of Japan, Ltd.
(Securities Investment Trust Account)

17,712

4.96

The Sankei Building Co., Ltd.

14,979

4.19

BNP PARIBAS SECURITIES SERVICESLUXEMBOURG/JASDEC/SECURITIES-AIFM

12,745

3.57

Aozora Bank, Ltd.

6,102

1.71

SCBHK AC LIECHTENSTEINISCHE LANDESBANK AG

5,727

1.60

Custody Bank of Japan, Ltd. (Money Trust Tax Account)

5,200

1.45

The Bank of Yokohama, Ltd.

5,067

1.42

228,935

64.16

100%

Name of unitholder
14.68%

14.31%

11.66%

15.63%

14.52%

6.75%
1.49%

4.52%
1.22%

5.53%
1.14%

16.88%

90%
80%
70%

40%
64.48%

63.92%

63.19%

30%
20%
10%
0%

End第1期末
of 1st FP

End第2期末
of 2nd FP

第3期末Endof 3rd FP[Number of Unitholders]
End of 1st FP

End of 2nd FP

End of 3rd FP

Financial institutions

37

55

54

Securities companies
Other Japanese
corporations
Non-Japanese
corporations, etc.

17

19

23

116

127

131

57

62

59

Individuals/Other

6,399

7,585

7,458

Total

6,626

7,848

7,725

Total

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SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company

Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

Capital

100 million yen

Financial instruments
business registration

Director-General of the Kanto Local Finance Bureau Registration(FIBO) No. 3094

The Sankei Building Co., Ltd. 100%

Real estate brokerage
licenseGovernor of Tokyo License (1) No. 102209

Investment Management Business, Investment Advisory andAgency Business, Type II Financial Instruments Business

Discretionary transaction
agency, etc. approval

Minister of Land, Infrastructure, Transport and Tourism ApprovalNo. 125

Shareholder composition
Main line of businessDirectors and auditors

5 directors
1 auditor

General Meeting of Shareholders

AuditorBoard of Directors

Investment Committee

Compliance Committee

President and CEO

Internal Audit Office

Investment Management Department
SANKEI REAL ESTATE Inc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management

Compliance OfficeFinance & IR Department

・Corporate planning, accounting
and general affairs
・Financials and IR

Fund Management Department
Private equity real estate funds, etc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management54